Haverty Furniture Companies (HVT) 8-K Havertys Reports Results for Third Quarter 2012

Exhibit 99.1

Havertys Reports Results for Third Quarter 2012

ATLANTA, GEORGIA, October 31, 2012 -- HAVERTY FURNITURE COMPANIES, INC. (NYSE: HVT and HVT.A) reports third quarter 2012 operating results of earnings per share of $0.15 compared to $0.01 for the same period of 2011.  The earnings per share for the nine months ended September 30, 2012 is $0.36 compared to a loss of ($0.07) for the same period of 2011.

Clarence H. Smith, chairman, president and chief executive officer, said, “We are pleased with our earnings results and effective leverage of sales growth.  The housing recovery is showing some signs of staying power and we will benefit as it rebounds.  We are well positioned in excellent markets and continue to strengthen our engagement with the middle to upper-middle income customer.”

Financial Highlights

Third Quarter 2012 Compared to Third Quarter 2011

·   Net sales increased 11.1% to $172.7 million.  Comparable store sales were up 10.0%.

·   Gross profit margins increased 70 basis points to 52.5% from 51.8% as a percent of sales, slightly ahead of expectations for the quarter.

·   Selling, general and administrative costs as a percent of sales decreased by 250 basis points. The increase in dollars of $4.6 million primarily resulted from variable selling costs such as commissions and third party credit costs which rose with the $17.3 million sales increase.  Non-management and incentive compensation were also higher.

·   A quarterly dividend, reinstated during the second quarter of 2012, of approximately $0.9 million was paid to stockholders.

Nine Months ended September 30, 2012 Compared to Same Period of 2011

·   Net sales increased 7.8% to $487.8 million.  Comparable store sales were up 7.1%.

·   Gross profit margins increased 100 basis points to 52.4% from 51.4% as a percent of sales.

·   Selling, general and administrative costs as a percent of sales decreased by 200 basis points.  The increase in dollars of $8.4 million was largely due to variable selling costs such as commissions and third party credit costs that stemmed from the $35.2 million increase in sales, as well as increased compensation.

Expectations and Other

·   Gross profit margins for the fourth quarter of 2012 are expected to be similar to the third quarter rate of 52.5%.

NEWS RELEASE – OCTOBER 31, 2012 Page 2

·   Selling, general and administrative costs for the fourth quarter of 2012 are estimated to be higher than in the third quarter in dollars but lower as a percent of sales.  Fixed and discretionary type expenses are expected to increase approximately $0.5 million from the third quarter level to $55.0 million and variable costs are estimated to be 17.8% of total sales.

·   Selling square footage is estimated to increase 2.5% in 2012 based on:  the opening of a new store in Baltimore, MD in the second quarter, entering the Midland, TX market early in the third quarter, opening a new location in the Dallas market in Allen, TX, and replacing a store in the Atlanta market with a new store in McDonough, GA in the fourth quarter.  Selling square footage in 2013 is expected to be flat or slightly down.

·   Cash flow from operations for the nine months ended September 30, 2012 was $48.3 million.

·   Cash at the end of the third quarter of 2012 totaled $75.0 million.  There is no funded debt and the $50.0 million credit facility was not used.

·   Capital expenditures are expected to be approximately $25.0 million for 2012 and $20.0 million for 2013 as store upgrades continue.

·   For the fourth quarter to date our written business has trended up by 16.7% in total and approximately 14.5% on a comparable store basis.  This compares to October last year when our total written business was down approximately 1.7%.  The increase for the full fourth quarter delivered sales will likely be three to five percentage points less than the written sales growth as is typical during an acceleration trend.

NEWS RELEASE – OCTOBER 31, 2012 Page 3

HAVERTY FURNITURE COMPANIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, except per share data – Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net sales	$	172,677		$	155,379		$	487,766		$	452,644
Cost of goods sold		82,004			74,941			232,002			219,849
Gross profit		90,673			80,438			255,764			232,795
Credit service charges		69			109			216			362
Gross profit and other revenue		90,742			80,547			255,980			233,157
Expenses:
Selling, general and administrative		85,082			80,445			242,728			234,282
Interest, net		154			177			473			576
Provision for doubtful accounts		30			23			101			124
Other (income) expense, net		(160	)		(185	)		(745	)		(368	)
		85,106			80,460			242,557			234,614
Income (loss) before income taxes		5,636			87			13,423			(1,457	)
Income tax expense (benefit)		2,322			(31	)		5,291			37
Net income (loss)	$	3,314		$	118		$	8,132		$	(1,494	)
Basic earnings (loss) per share:
Common Stock	$	0.15		$	0.01		$	0.37		$	(0.07	)
Class A Common Stock	$	0.14		$	0.01		$	0.35		$	(0.07	)
Diluted earnings (loss) per share:
Common Stock	$	0.15		$	0.01		$	0.36		$	(0.07	)
Class A Common Stock	$	0.14		$	0.01		$	0.35		$	(0.07	)
Basic weighted average shares outstanding:
Common Stock		19,163			18,666			19,018			18,600
Class A Common Stock		2,887			3,283			2,986			3,309
Diluted weighted average shares outstanding:
Common Stock		22,371			22,162			22,319			18,600
Class A Common Stock		2,887			3,283			2,986			3,309
Cash dividend per common share:
Common Stock	$	0.0400		$	—		$	0.0800		$	—
Class A Common Stock	$	0.0375		$	—		$	0.0750		$	—

NEWS RELEASE – OCTOBER 31, 2012 Page 4

HAVERTY FURNITURE COMPANIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands - Unaudited)

	September 30, 2012		December 31, 2011		September 30, 2011
	(Unaudited)				(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	75,026	$	49,585	$	66,485
Restricted cash and cash equivalents		7,011		6,813		6,812
Accounts receivable		9,564		11,451		11,082
Inventories		84,530		93,713		81,637
Prepaid expenses		9,762		11,195		9,210
Other current assets		5,509		4,918		3,718
Total current assets		191,402		177,675		178,944
Accounts receivable, long-term		529		449		478
Property and equipment		187,033		179,333		176,448
Deferred income taxes		23,526		22,681		11,672
Other assets		3,908		4,962		5,239
Total assets	$	406,398	$	385,100	$	372,781
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	18,490	$	18,233	$	17,707
Customer deposits		21,676		14,572		19,921
Accrued liabilities		39,107		32,171		30,351
Deferred income taxes		6,996		6,635		6,976
Current portion of lease obligations		819		762		550
Total current liabilities		87,088		72,373		75,505
Lease obligations, less current portion		12,447		12,284		8,158
Other liabilities		34,442		37,774		34,693
Commitments		—		—		—
Total liabilities		133,977		122,431		118,356
Stockholders’ equity		272,421		262,669		254,425
Total liabilities and stockholders’ equity	$	406,398	$	385,100	$	372,781

NEWS RELEASE – OCTOBER 31, 2012 Page 5

HAVERTY FURNITURE COMPANIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands – Unaudited)

	Nine Months Ended September 30,
	2012			2011
Cash Flows from Operating Activities:
Net  income (loss)	$	8,132		$	(1,494	)
Adjustments to reconcile net income (loss) to net cash   provided by operating activities:
Depreciation and amortization		14,334			13,542
Share-based compensation expense		1,944			1,569
Provision for doubtful accounts		101			124
Other		534			116
Changes in operating assets and liabilities:
Accounts receivable		1,706			2,682
Inventories		8,914			10,301
Customer deposits		7,104			6,336
Other assets and liabilities		(1,647	)		(1,679	)
Accounts payable and accrued liabilities		7,193			(1,387	)
Net cash provided by operating activities		48,315			30,110
Cash Flows from Investing Activities:
Capital expenditures		(20,166	)		(14,480	)
Restricted cash and cash equivalents		(198	)		(6,812	)
Other		442			155
Net cash used in investing activities		(19,922	)		(21,137	)
Cash Flows from Financing Activities:
Payments on lease obligations		(553	)		(391	)
Dividends paid		(1,750	)		—
Treasury stock acquired		(218	)		—
Proceeds from exercise of stock options		84			270
Other financing activities		(515	)		(412	)
Net cash used in financing activities		(2,952	)		(533	)
Increase in cash and cash equivalents during the period		25,441			8,440
Cash and cash equivalents at beginning of period		49,585			58,045
Cash and cash equivalents at end of period	$	75,026		$	66,485

NEWS RELEASE – OCTOBER 31, 2012 Page 6

We report our earnings per share using the two-class method.  The income or loss per share for each class of common stock is calculated assuming 100% of our earnings or losses are distributed as dividends to each class of common stock based on their contractual rights.

The Common Stock of the Company has a preferential dividend rate of at least 105% of the dividend paid on the Class A Common Stock. The Class A Common Stock, which has ten votes per share as opposed to one vote per share for the Common Stock (on all matters other than the election of directors), may be converted at any time on a one-for-one basis into Common Stock at the option of the holder of the Class A Common Stock.

The following is a reconciliation of the earnings (loss) and number of shares used in calculating the diluted earnings (loss) per share for Common Stock and Class A Common Stock (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Numerator:
Common:
Distributed earnings	$	766	$	—	$	1,528	$	—
Undistributed earnings (loss)		2,134		101		5,552		(1,277	)
Basic		2,900		101		7,080		(1,277	)
Class A Common earnings (loss)		414		17		1,052		—
Diluted	$	3,314		118	$	8,132		(1,277	)
Class A Common:
Distributed earnings	$	108	$	—	$	222	$	—
Undistributed earnings (loss)		306		17		830		(217	)
	$	414	$	17	$	1,052	$	(217	)
Denominator:
Common:
Weighted average shares outstanding - basic		19,163		18,666		19,018		18,600
Assumed conversion of Class A Common Stock		2,887		2,383		2,986		—
Dilutive options, awards and common stock equivalents		321		213		315		—
Total weighted-average diluted Common Stock		22,371		22,162		22,319		18,600
Class A Common:
Weighted average shares outstanding		2,887		3,283		2,986		3,309
Antidilutive shares excluded from the denominator due to options’ exercise prices being greater than the average market price		291		788		292		797

NEWS RELEASE – OCTOBER 31, 2012 Page 7 

Also excluded from the denominator for the nine months ended September 30, 2011, because of the net loss for that period, is the assumed conversion of the Class A Common Stock and approximately 226,000 shares for dilutive options, awards and common stock equivalents.

About Havertys

Havertys, established in 1885, is a full-service home furnishings retailer with 121 showrooms in 17 states in the Southern and Midwestern regions providing its customers with a wide selection of quality merchandise in middle to upper-middle price ranges.  Additional information is available on the company’s website at www.havertys.com

News releases include forward-looking statements, which are subject to risks and uncertainties.  Factors that might cause actual results to differ materially from future results expressed or implied by such forward-looking statements include, but are not limited to, general economic conditions, the consumer spending environment for large ticket items, competition in the retail furniture industry and other uncertainties detailed from time to time in the company’s reports filed with the SEC.

Conference Call Information

The company will sponsor a conference call Thursday, November 1, 2012 at 10:00 a.m. Eastern Daylight Time to review its results.  Listen-only access to the call is available via the web at www.havertys.com (For Investors) and at www.streetevents.com (Individual Investor Center), both live and for a limited time, on a replay basis.

Contact:

Haverty Furniture Companies, Inc., 404-443-2900

Dennis L. Fink

EVP & CFO

Jenny Hill Parker

SVP, Finance, Secretary and Treasurer

SOURCE:  Haverty Furniture Companies, Inc.